MFA Submits Response to HMT’s and HMRC’s Technical Consultation on the VAT treatment of Fund Management Services

MFA submitted a response to HMT’s and HMRC’s technical consultation setting forth a proposed reform of the legislation that provides for the VAT treatment of fund management services.

In the response, MFA provided HMT and HMRC with recommendations on both the proposed approach to the legislative drafting for the SIF Exemption and broader VAT policy reform. Importantly, with regard to broader VAT policy reform, MFA urged HMT and HMRC to consider applying a VAT zero-rate to fund management fees charged to UK entities established within the UK’s Private Fund Limited Partnership and Qualifying Asset Holding Company (“QAHC”) regimes.

MFA commented that this recommendation, if adopted, would further advance the stated goal of enhancing the attractiveness of the UK as a funds domicile by incentivizing the uptake and usage of these newer regimes by simplifying the UK VAT considerations for UK fund managers.